Flagstar Bank

Mortgage lenders are embracing the broker-wholesale channel as a low-cost way to extend their reach and maintain volume in the face of rising home prices and interest rates that are putting a damper on origination activity.

Tight margins, regulatory clarity and a renewed appetite to expand have made mortgage brokers and the wholesale channel attractive again, at least to the small and medium mortgage lenders.

Warehouse lines of credit are getting more expensive as short-term interest rates rise, and lenders have limited options for reducing their costs.